TUBE INVESTMENTS OF INDIA LTD. Investor Presentation

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1 1 TUBE INVESTMENTS OF INDIA LTD Investor Presentation

2 2 DISCLAIMER This presentation contains forward-looking statements which may be identified by their use of words like plans, expects, will, anticipates, believes, intends, projects, estimates or other words of similar meaning. All statements that address expectations or projections about the future, including, but not limited to, statements about the strategy for growth, product development, market position, expenditures, and financial results, are forward-looking statements. Forward-looking statements are based on certain assumptions and expectations of future events. The companies referred to in this presentation cannot guarantee that these assumptions and expectations are accurate or will be realized. The actual results, performance or achievements, could thus differ materially from those projected in any such forward-looking statements. These companies assume no responsibility to publicly amend, modify or revise any forward looking statements, on the basis of any subsequent developments, information or events, or otherwise.

3 3 Table Of Contents Section 1 Overview of Murugappa Group Section 2 Overview of Tube Investments of India Ltd. Section 3 Divisional Overview Section 4 Financial Services Section 5 Financials

4 4 Section 1 Overview of Murugappa Group

5 5 Overview of Murugappa Group Murugappa Group USD 4.4 Billion Murugappa Conglomerate

Overview of Murugappa Group Composition of

6 Overview of Murugappa Group Composition of Group Turnover and Profits CIFCL 8% Chola MS 6% Others 4% CUMI 9% TII 17% Sales Composition EBITDA Composition Coromandel 44% EID parry 12% CIFCL 10% Chola MS 3% Others 4% CUMI 15% TII 15% Coromandel 42% EID parry 11% 6

7 7 Section 2 Overview of Tube Investments

8 8 Overview of Tube Investments Evolution of the Company TI Cycles of India Ltd commenced bicycles manufacturing in 1949 in collaboration with Tube Investments Ltd UK As a backward integration Tube Products of India Ltd was formed in 1955 to service the requirement of Tubes to TI Cycles Tube Products of India merged with TI Cycles of India in Name changed to Tube Investments of India Ltd. Another backward integration for the production of Cold Rolled Strips and Chains in1962 Metal formed products for the automobile industry in 1982 GDR issue of $ 50 million in 1994 Tube Investments of India Ltd became a 100% domestic Company in 2000 Acquired 77.13% stake in an industrial chain company in France in 2010 Acquired 70.12% stake in Shanthi Gears Limited, a Coimbatore based gear manufacturing company.

Overview of Tube Investments Company Overview

1320 Cr (38%) PBIT: 131 Cr (41%) ROCE: 29.

frames & Chains) Sales: 859 Cr (25%) PBIT: 112 Cr

8% Cycles (Cycles & E- Scooters) Sales: 1280 Cr

4% Financial Services G W Premium: 1506 Cr

9 Overview of Tube Investments Company Overview Tube Investments of India Sales: 3459 Cr PBT: 245 Cr ROCE: 16.1% Engineering (Welded Tubes & Strips) Sales: 1320 Cr (38%) PBIT: 131 Cr (41%) ROCE: 29.2 % Metal Formed Products (CRF Sections, Door frames & Chains) Sales: 859 Cr (25%) PBIT: 112 Cr (35%) ROCE: 22.8% Cycles (Cycles & E- Scooters) Sales: 1280 Cr (37%) PBIT: 76 Cr (24%) ROCE: 84.4% Financial Services G W Premium: 1506 Cr Disbursements: 8889 Cr Managed Assets:14643 Cr *Figures in brackets represent contribution in % terms to total (Excl. Financial Services) for the year

10 Holds 74.00% equity in Chola MS General Insurance 10 Overview of Tube Investments Key Competitive Strengths Corporate Overview Leader in all business segments Precision welded tubes - CDW segment - ~ 50% market share Automotive Chains ~ 40% market share Roll formed Car doorframes ~ 49% market share Segment Analysis Bicycles specials segment ~ 50% market share Strong customer relationships All major automotive OEM s as customers Proximity to consuming markets Facilities across the country High quality levels; Car doorframes & Automotive chains Promoter of Financial Services Holds 54.49% equity in Chola Finance Other Financial Services 32% Insurance 15% Cycles 19% Metal Formed Products 15% Engineeri ng 19%

11 Overview of Tube Investments Shareholding Pattern: 30 th September, 2012 Particulars Holding % Promoter Group Mutual Funds Banks / Insurance Companies 3.73 Depository Receipt Holders 3.45 Bodies Corporate 7.50 Foreign Institutional Investors 7.90 General Public

12 12 Section 3 Divisional Overview

13 13 Section 3 Divisional Overview - Engineering

14 14 Divisional Overview - Engineering Engineering Overview Precision Tubes Cold Rolled Steel Strips Industry has 2 segments - welded and seamless The size of the market is approx. 0.5 Mn Tonnes Our focus - Ferrous Cold Drawn Welded (CDW) Electric Resistance Welded (ERW) Applications in Automotive, boiler, cycle and general engineering sectors Regionalized industry due to high element of freight cost Integrated manufacturers are our competitors Focus on Special grades Application in Auto ancillary / Bearings / cycles / General engineering / Furniture / Chains amongst others The major application is found in automotive sector 2 wheelers contribute about 40% of the demand 4 wheelers contribute the rest Our CDW market share is ~ 50%

15 15 Divisional Overview - Engineering Engineering: Segment Analysis Non-Auto, 19% Auto, 81% High share of revenue from Auto

16 16 Divisional Overview - Engineering : Key Contributors Auto Industry growth of 14% Two Wheelers - 17%; Commercial vehicles 20% Volume growth of 14% Contribution of new products to turnover 11% Tube Sales surpasses the 1000 Cr mark

17 Divisional Overview - Engineering Financial Summary - Engineering Particulars % Growth Volumes (Tonnes) % to Sales Strips: Domestic % Exports % Tubes: Domestic % Exports % Tubular Components % Sales (Net) (including Inter Unit) % Other Income % 0.5% 16.7% Total Income % EBITDA % 11.8% 15.0% Depreciation % 2.3% 11.1% PBIT % 9.5% 15.9% Capital Employed Net Fixed Assets Net Working Capital Segment Capital Employed ROCE% 29.2% 29.2% Sales/NWC

18 Divisional Overview - Engineering : Key Drivers Auto Industry growth to be lower than previous year Investments in Infrastructure sector to grow Capacity building in Tubes segment Greenfield facility in South for Large Diameter Tubes Greenfield facility in North CAPEX 190 Cr. Entry into new product segments Stainless Steel Tubes Started production in Feb 12 Focus on internal efficiencies Cost reduction Timely price recoveries 18

19 19 Divisional Overview - Engineering Financial Summary - Engineering Particulars H1 H1 H1 H1 % Growth Volumes (Tonnes) % to Sales Strips: Domestic % Exports % Tubes: Domestic % Exports % Tubular Components % Sales (Net) (including Inter Unit) % Other Income % 0.4% -33.3% Total Income % EBITDA % 10.9% Depreciation % 2.0% 14.3% PBIT % 8.8% -3.2% APPLICATION OF FUNDS Net Fixed Assets (Incl. CWIP) Net Working Capital Total Capital Employed ROCE% 24.5% 31.2% Sales/NWC

20 Divisional Overview - Engineering Performance Trend Particulars H1 Sales PBIT PBIT Margin 4.9% 1.8% 9.6% 9.5% 9.0% 7.9% ROCE 11.9% 5.2% 22.1% 29.2% 29.2% 24.7% 20

21 Divisional Overview - Engineering Engineering Performance Q Q Q Q Q Q Sales PBIT 21

22 22 Section 3 Divisional Overview Metal Formed Products

23 23 Divisional Overview Metal Formed Products Overview Auto Products Non - Auto Growth in Automotive industry Market leader with ~ 49% market share in doorframes ~ 40% in automotive chains Estimated annual wagon requirement 16,500 Robust manufacturing & infrastructure growth ~ 40% market share in industrial chains

24 24 Divisional Overview Metal Formed Products Overview Revenue from Railway Products Segment Analysis Railways 15% H1 Non- Auto 22% Auto 63%

25 25 Divisional Overview Metal Formed Products Sales volume growth: : Key Contributors Automotive chains 13% ; After Market (Kits) 35% IC Domestic 13%; Exports 40% ECC Domestic 27% 4w business in FB parts gone up from 13% to 22% Capacity expansion Drive by 17% and Cam by 37% in RCD and UTK plants (combined) New Product Development 15% in Industrial Chains

26 Divisional Overview Metal Formed Products Financial Summary Volumes Particulars % Growth % to Sales Door Frames (Lakh Sets) % Sections for railway wagons (Sets) Chains % Domestic (Lac ESS feet) % Exports (Lac ESS feet) % Sales (Net) (including Inter Unit) % Other Income % 0.8% 66.7% Total Income % EBITDA % 17.5% 10.4% Depreciation % 4.3% 12.1% PBIT % 13.2% 9.8% Capital Employed Net Fixed Assets Investments Net Working Capital Segment Capital Employed ROCE % 22.8% 24.0% Sales/NWC

27 27 Divisional Overview Metal Formed Products Overseas Chains Subsidiary Financiere C 10 Holding company of Sedis Acquired 77.13% for Rs. 44 Cr. Two plants in France About 23% market share in France Turnover 34 Mn 29 Mn PBT 1 Mn 0.5 Mn Five global patents Leader in special and engineering class chains Range of industries catered to: Car / escalator / textiles / food processing / packaging / cement / sugar / paper / water treatment / lumber / dams / amusement park

28 Divisional Overview Metal Formed Products 2012-13: Key Drivers Auto Industry growth to be lower than previous year Investments in Infrastructure sector to grow Capacity building

28 28 Divisional Overview Metal Formed Products : Key Drivers Auto Industry growth to be lower than previous year Investments in Infrastructure sector to grow Capacity building Greenfield facility in South Existing locations Fine Blanked facility CAPEX 110 Cr. Leverage from acquisition Technology for Indian markets Manufacture in India for Global markets Technical services

29 29 Divisional Overview Metal Formed Products Financial Summary Particulars H1 H1 H1 H1 % Growth Volumes % to Sales Doorframes (Sets) % Sections for railway wagons (Sets) % Chains: Domestic (Lac ESS feet) % Exports (Lac ESS feet) % Sales (Net) (including Inter Unit) % Other Income % 0.6% 1.5% Total Income % EBITDA % 17.4% -18.4% Depreciation % 4.1% -11.1% PBIT % 13.3% -20.7% APPLICATION OF FUNDS Net Fixed Assets (Incl. CWIP) Investments Net Working Capital Total Capital Employed ROCE% 17.8% 24.6% Sales/NWC

30 30 Divisional Overview Metal Formed Products Performance Trend Particulars H1 Sales PBIT PBIT Margin 15.2% 10.7% 13.9% 13.3% 13.0% 10.9% ROCE 20.7% 15.0% 21.5% 24.0% 22.8% 18.3% 30

Divisional Overview - Metal Formed Products Metal Formed Products Performance 250 200 231 206 191 231

31 Divisional Overview - Metal Formed Products Metal Formed Products Performance Q Q Q Q Q Q Sales PBIT 31

32 32 Section 3 Divisional Overview Cycles & E Scooters

33 33 Divisional Overview Cycles & E Scooters Overview Industry Our Segment Analysis Bicycle Industry size: ~ 15 Mn Standards 45%; negligible growth Stds Specials Specials 55%; growing at over H1 25% 75% 10% % 72% Fitness Industry: ~ 1200 Cr % 32% 70% 68% Growing at ~ 24% % 66% Electric Scooters/ Pedelecs % 65% Nascent segment

34 34 Divisional Overview Cycles & E Scooters : Key Contributors Sales growth higher than industry 15% growth in Value 8% growth in Volume New Products 26% revenue from sale of new products Business Model Promotion of Cycling Cyclothons, Bikeathons, Fun Fitness and Freedom rides 830 retail outlets under various formats contributes to 25% of revenue

35 35 Divisional Overview Cycles & E Scooters Financial Summary Particulars % Growth Volumes (Lac Nos) % Sales (Net) % Other Income % 0.5% 116.7% Total Income % EBITDA % 7.6% -2.4% Depreciation % 0.6% PBIT % 7.0% -2.6% Capital Employed Net Fixed Assets Investments 4 3 Net Working Capital Segment Capital Employed ROCE % 84.4% 104.0% Sales/NWC

36 36 Divisional Overview Cycles & E Scooters : Key Drivers Continue expansion of Retail Formats Growth opportunity in Exports Explore International Brand Acquisition Cycles CAPEX 50 Cr. Fitness

37 Divisional Overview Cycles & E Scooters Financial Summary Particulars H H H H1 % Growth Volumes % to Sales Cycles (Lac nos) % Sales (Net) (including Inter Unit) % Other Income % 1.1% -42.9% Total Income % EBITDA % 7.3% 2.2% Depreciation % 0.5% PBIT % 6.8% 2.3% APPLICATION OF FUNDS Net Fixed Assets (Incl. CWIP) Investments 4 3 Net Working Capital Total Capital Employed ROCE% 55.7% 70.2% Sales/NWC

38 38 Divisional Overview Cycles & E Scooters Performance Trend Particulars H1 Sales PBIT PBIT Margin 3.9% 4.0% 7.3% 7.0% 5.9% 6.2% ROCE 26.2% 51.8% 69.7% 104.0% 84.4% 56.1% 38

39 Divisional Overview - Cycles & E Scooters Cycles & E Scooters Performance Q Q Q Q Q Q Sales PBIT 39

40 40 Section 4 Financial Services

41 41 Financial Services: Cholamandalam Investment & Finance Co. Ltd Overview Investments Performance in H1 Investment of Rs. 682 Cr % of capital held by TII Average Cost of Acquisition per share Rs. 89 Market price per share Rs. 218 (as on 30/09/2012) Disbursements in asset financing Rs Cr. Vehicle finance growth of 38% Home equity growth of 40% Capital adequacy ratio 18.2% Presence 484 branches Profit after tax Rs. 139 Cr

42 876 1, ,026 9,839 11,620 2,171 3,083 3, Financial Services: Cholamandalam Investment & Finance Co. Ltd Performance Overview H1 10,000 Disbursements Vehicle Finance Home Equity Gold 9, ,000 1,528 7,000 6,000-5,000 1, ,000 7,306 3,000 2,000 4,496 4,168 1,000 - In Crs H1 14,000 12,000 10,000 8,000 6,000 4,000 2,000 In Crs H1 AUM Vehicle Finance Home Equity Business Finance Personal Loans Gold 1,600 1,400 1,200 1, H1 Total Income Profit Before Tax 290 In Crs In Crs. Vehicle Finance Home Equity Business Finance Personal Loans Gold H1

43 Financial Services: Cholamandalam Investment & Finance Co. Ltd : Key Drivers Disbursements growth planned Geographical Expansion New Braches planned Customer Engagement & Retention Initiatives Proactive Top ups to Customers Enhancing customer interaction post disbursal 43

44 44 Financial Services: Cholamandalam MS General Insurance Overview About Mitsui Sumitomo Largest non-life insurer in Asia & Largest in Japan Global player with presence in over 40 countries Rated A+ by Standard & Poor Front runners in Property & Marine lines of businesses Chola MS JV Equity Capital & Premium ` 367 Cr Shareholding pattern TII holds 74% Mitsui Sumitomo 26% Market Share 2.6% Solvency Ratio 1.49 Distribution Framework Market presence - over 90 branches Multiple business tie-ups banks, NBFCs, Auto mfrs etc Leading insurer for Japanese / Korean business interests in India

45 Financial Services: Cholamandalam MS General Insurance Business Mix Marine 4% Chola Business Mix FY 2011-12

2012-13 Govt Health 12% Travel+others 2% Fire+Engg 8% Health 7% PA 3% Liability 1% Motor 65% Motor 64% Fire+Engg

45 45 Financial Services: Cholamandalam MS General Insurance Business Mix Marine 4% Chola Business Mix FY Travel+others 2% Govt Health 12% Fire+Engg 7% Health 5% PA 4% Liability 1% Marine 3% CholaMS Business Mix H1 FY Govt Health 12% Travel+others 2% Fire+Engg 8% Health 7% PA 3% Liability 1% Motor 65% Motor 64% Fire+Engg Health PA Liability Motor Marine Govt Health Travel+others Fire+Engg Health PA Liability Motor Marine Govt Health Travel+others

46 Financial Services: Cholamandalam MS General Insurance Chola MS Income Statement Particulars H1 Gross Written Premium Less: RI cession Net Written Premium Net Earned Premium Commission Customer Acquisition costs Less: RI Commission etc Net Commission costs Incurred claims Total Claims People Related costs Other operating expenses Total Expenses of Management Underwriting results (88) (83) (48) Investment income Operating PBT (23) PBT (23) PAT (23) Combined ratio 114% 110% 99.9% 46

47 47 Financial Services: Cholamandalam MS General Insurance : Key Drivers Aggressive growth planned in strategic channels Inclusion of new agents planned Volume scale up in personal line and health products Scale up in new tie-ups / new products / niche areas Rationalise growth across geographies Continued focus on people / branch productivity Enhancing sourcing through web motor, health, travel etc

48 Section 5 Financials

49 49 Financials Tube Investments of India Ltd. Performance Trend Description H1 Sales PBIT PBIT Margin 5.6% 2.9% 6.8% 10.4% 9.3% 8.2% ROCE 8.9% 5.1% 10.2% 17.4% 16.1% 11.5% EPS EPS (Cons)

50 50 Financials Tube Investments of India Ltd. Cash Generation Description H1 PAT Depreciation Change in NWC Exceptional Items Free Cash Flow Capital Expenditure

51 51 Financials Tube Investments of India Ltd. Financial - Summary Particulars % Growth % to Sales Sales (Net) % Other Income % Total Income % Raw Material (Net of Inventory change) % 60.7% 20.1% Employee Cost % 8.2% 6.1% Other Costs % 20.0% 18.6% Total Cost (before Depn. & Interest) % EBITDA % 12.0% 11.5% Exceptional/ Non-operating 21 Depreciation % 2.3% 10.1% Interest % 2.2% 15.2% PBT % 8.1% 1.7% PAT % 5.7% 5.9%

52 Financials Tube Investments of India Ltd. Financial - Summary Particulars H H H1 % to Sales H1 % Growth Sales (Net) % Other Income % Total Income % Raw Material (Net of Inventory change) % 62.5% 7.0% Employee Cost % 7.5% 8.6% Other Costs % 19.7% 14.6% Total Cost (before Depn. & Interest) % EBITDA % 11.9% Depreciation % 2.1% 5.6% Interest % 2.2% 21.6% PBT % 7.6% -19.9% PAT % 5.6% -20.0% 52

53 Financials Tube Investments of India Ltd. Financial - Summary PARTICULARS As at As at EQUITY AND LIABILITIES Shareholder s Funds a) Share Capital b) Reserves and Surplus Share Application Money Pending Allotment - 0 Non-Current Liabilities a) Long Term Borrowings b) Deferred Tax Liabilities (Net) Current Liabilities a) Short Term Borrowings b) Trade Payables a) Other Current Liabilities b) Short Term Provisions TOTAL Cont 53

54 Financials Tube Investments of India Ltd. Financial - Summary PARTICULARS As at As at ASSETS Non-Current Assets a) Fixed Assets (i) Tangible Assets (ii) Capital Work-in-Progress b) Non-Current Investments c) Long Term Loans and advances Current Assets a) Current Investments 11 - b) Inventories c) Trade Receivables d) Cash and Cash Equivalents e) Open Offer Escrow Deposit 173 f) Short Term Loans and Advances TOTAL

55 55 Financials Tube Investments of India Ltd. Dividend Per Share Per Share of FV 2/ Uninterrupted Dividend Record since inception Dividend distribution policy: Around 30% of PAT

56 Financials Tube Investments of India Ltd. Consolidated Financial - Summary Particulars Segment Revenue Cycles / Components / E Scooters Engineering Metal Formed Products Un-allocable Operating Income 0 0 Insurance Other Financial Services Others 7 5 Total Inter Segment Revenue (135) (116) Total Revenue Segment Results Cycles / Components / E Scooters Engineering Metal Formed Products Insurance 16 (22) Other Financial Services Others 2 1 Total Interest (78) (69) Other Un-allocable Expenditure Net of Un-allocable Income / Inter Segment Eliminations (19) (15) Un-allocable Exceptional Items - 21 Net Profit / (Loss) before Tax Capital Employed (Segment Assets - Segment Liabilities) Cycles / Components / E Scooters Engineering Metal Formed Products Insurance Other Financial Services Others 4 3 Other Un-allocable Assets Net of un-allocable Liabilities 36 (15) Total

57 Financials Tube Investments of India Ltd. Consolidated Financial - Summary Particulars Segment Revenue Cycles / Components / E Scooters Engineering Metal Formed Products Un-allocable Operating Income Insurance Other Financial Services Others Total Inter Segment Revenue (70.91) (79.17) Total Revenue Segment Results Cycles / Components / E Scooters Engineering Metal Formed Products Insurance Other Financial Services Others Total Interest (45.33) (37.40) Other Un-allocable Expenditure Net of Un-allocable Income / Inter Segment Eliminations (7.17) (8.43) Un-allocable Exceptional Items Net Profit / (Loss) before Tax Capital Employed (Segment Assets - Segment Liabilities) Cycles / Components / E Scooters Engineering Metal Formed Products Insurance Other Financial Services Others Other Un-allocable Assets Net of un-allocable Liabilities Total

58 58 Financials Tube Investments of India Ltd. Financial Calendar Schedule Q III January, 2013 Q IV May, 2013

59 Financials Tube Investments of India Ltd. Investor Desk Contact Particulars Mr. U Rajagopal Phone RajagopalU@tii.murugappa.com 59

60 THANK YOU

TUBE INVESTMENTS OF INDIA LTD. Investor Meet NOVEMBER, 2011

TUBE INVESTMENTS OF INDIA LTD. Investor Meet NOVEMBER, 2011 1 TUBE INVESTMENTS OF INDIA LTD Investor Meet NOVEMBER, 2011 2 DISCLAIMER This presentation contains forward-looking statements which may be identified by their use of words like plans, expects, will,